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#937198 - 04/07/08 03:33 PM leap year int calcs disclosed in loan docs?
Chocaholic Offline
Gold Star
Joined: Aug 2005
Posts: 443
Northwest
We currently calculate interest on a 365/365 basis... given this year is a leap year, is there any special language we need to have or should have included in our loan documents. I did find language under the actuarial method under reg Z.. that states:(d) Actuarial method
(1) Unless otherwise specifically provided by law, all interest on closed-end accounts, loans or extensions of credit charged under this or any section shall be computed only on the outstanding balance subject to finance charge by the actuarial method of calculation. On all closed-end accounts, loans or extensions of credit, interest shall be based on a 365-day year and on a 366-day year during a leap year, except in the case of loans secured by residential properties or ... so I'm thinking it is not necessary to address leap year specifically... what are others doing?

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Lending Compliance
#937205 - 04/07/08 03:39 PM Re: leap year int calcs disclosed in loan docs? Chocaholic
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
As long as your TILA disclosures were based on the interest charges that would apply to the loan, how the interest is calculated is purely a contactual issue.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#937253 - 04/07/08 04:19 PM Re: leap year int calcs disclosed in loan docs? rlcarey
Chocaholic Offline
Gold Star
Joined: Aug 2005
Posts: 443
Northwest
Thank you, so if my contract only says 365/365 and is silent to leap year...is that a problem.. our state law is silent on this as well... only makes reference to simple interst.. ugh!

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